The Economics of Tourism Destinations Theory and Practice.pdf
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1 The economic characteristics of the tourism sector 1
What is tourism? 1
The economic characteristics of tourism 10
What is a tourism destination? 21
Questions 22
2 Measuring tourism 24
Introduction 24
A tourism information system or destination management
information system 25
Measurement of day visitors 26
The tourism satellite account 29
WTO tourism statistics 49
Tourism and/or holiday surveys 49
The tourism production index – WES 53
The Swiss tourism barometer 54
Questions 56
Gross Value Added (GVA) 59
Gross Domestic Product (GDP) 59
Gross National Product (GNP) 59
Difference between GDP and GNP: net factor incomes received
from abroad 59
Disposable income 60
Tourism (Direct) Gross Value Added (TGVA) 60
Tourism Gross Domestic Product (TGDP) 60
Contents
viii
3 Tourism demand 61
Determinants of tourism demand 61
Determinant factors of tourist expenses 71
Trends in tourism demand 73
Monitoring source markets for destinations 85
Tourism demand worldwide 85
Holiday participation and holiday frequency 91
Seasonality 92
Questions 99
4 Overtourism 106
‘Overtourism’: What does it mean? 106
The causes of ‘overtourism’ 107
Cities do not have the monopoly on overtourism 112
Indicators of overtourism 118
Overtourism and local resistance 119
Strategies and measures 120
The role of DMO’s and overtourism 123
Concluding remarks 124
Questions 124
5 Tourism’s vulnerability: Terrorism and pandemics 128
Introduction 128
Tourism demand and terrorism 129
Measurement of terrorism impact 130
Security threats are more than terrorism 133
Tourism demand and pandemics 134
The German tourism market and COVID-19 137
COVID-19 impacts of inbound tourism on the Australian economy 138
Government support to the tourism sector 140
Recovery: business as usual? 142
Questions 144
6 Tourism supply 146
Tourism supply in the tourism system 146
Tourism supply, the tourist product and its life cycle 150
Tourism product development 152
Tourism supply and market structures 155
Supply trends 161
Artificial Intelligence (AI) and the tourism industry 176
Questions 189
7 Pricing and taxation 194
Pricing in tourism 194
Determinants of tourism prices 195
Contents
ix
Pricing objectives 196
Pricing approaches 196
The Hubbart formula for determining room rates 199
Break-even analysis 200
Yield management 201
Peak-load pricing 205
Pricing and elasticity of demand 206
Tourism and taxation 206
A tourism tax: Why? 207
Who pays the tourism tax bill: the tourist or the producer? 208
Tax receipts not always what is expected 213
Questions 214
8 Competition and the tourism destination 217
Introduction 218
The competitive forces of M. Porter 220
Porter’s generic competitive strategies 223
The determinants of competitive advantage in tourism 225
The Poon concept 230
The WES approach 233
The price-competitiveness approach 234
The Bordas model 236
The Ritchie and Crouch conceptual model of destination
competitiveness 238
The Dwyer-Kim model 245
Synthesis of the models 247
Ten key factors for a competitive destination 248
The Travel and Tourism Competitiveness Index (TTCI) 253
Travel and Tourism Development Index (TTDI) the successor
to the TTCI 257
The partial model of destination competitiveness of Modul
University 260
Questions 262
9 Forecasting tourism demand 267
Introduction 267
Concepts of demand measurement 268
Qualitative methods 270
Traditional approaches 270
The Delphi model 270
Judgement-aided models 273
Quantitative methods 276
Univariate time-series methods 277
Regression analysis or causal methods 280
Test for significance 282
A generic demand model 284
Contents
x
Gravity and trip-generation models 285
Case studies based on regression analysis 287
Final remarks 300
Questions 301
10 Tourism as a development strategy 305
Introduction 305
Tourism and the value chain 306
Possible options for a good strategy for regional development 309
Sustainable tourism 310
Tourism as a strategic option for regional development 311
Basic and non-basic activities 311
Comparative advantages of tourism 312
Other benefits of the tourism sector 314
Economic disadvantages 314
Incidental costs of tourism 316
Can tourism be a strategic vehicle in developed and less developed
countries? 318
Critical remarks 319
Questions 320
11 Tourism export-led growth 323
Introduction 323
Methodologies for measuring tourism’s contribution to
economic growth 325
Case studies of tourism export-led growth 327
Tourism and poverty reduction 341
Income inequality from the personal
income point of view 343
Income inequality from the regional point of view 348
Conclusion 349
Questions 350
12 The economic impact of tourism 355
Introduction 355
Balance of payments and tourism 356
The structure of the balance of payments 357
The real tourism external account 359
The tempting tourism multiplier 361
The multiplier and input-output analysis 368
Measurement of income generation 372
Measurement of employment generation 376
Special characteristics of employment 380
The impact of events: special features 381
Contents
xi
Computable general equilibrium models 383
Use of CGE modelling in tourism 388
Questions 400
13 Micro-evaluation of projects in the tourism and
hospitality industry 406
Introduction 406
The nature of a tourism investment appraisal 407
The discounting methods 409
The necessity for a feasibility study 414
Questions 417
14 Macro-evaluation of projects in the tourism and
hospitality industry 418
Foundations of CBA 418
Externalities in tourism 419
Identification of cost and benefit items 423
Quantification of cost and benefit items 425
Valuation of cost and benefit items 426
Willingness to pay and consumer surplus 427
Calculation of NPV and/or IRR 435
Three case studies of CBA in tourism 438
Final remarks 446
Questions 447
15 Tourism and sustainable development 450
Definitions 450
Measuring the Sustainability of Tourism (MST) 452
Sustainable tourism as a development tool 454
Key issues for sustainable tourism 456
Which sustainability model? 458
Impact of tourism on climate change 460
Impact climate change on tourism 468
Impact of tourism on the environment 477
Socio-cultural impacts of tourism 479
Conclusion 480
Questions 481
Index 487

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